 for Wednesday, May 16th. May have a roll call, please. Council Member Harlan. Here. Council Member Bertrand. Bertrand, here. Council Member Peterson. Here. Council Member Botthorff. Here. Mayor Termini. Here. Please rise and join me in the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. This meeting is being cablecast live on Charter Communications, cableTVChannel 8 and AT&TUverseChannel 99. Meetings can also be viewed from the city's website, cityofcapitola.org. Our technician tonight is Jen Cameron. Thank you very much. And the whole, all the crowd of citizens, please make sure your cell phones are off, okay? And please put your name at the podium if you choose to speak to us tonight. Are there any additional materials? Madam City Clerk? None. None. Are there any additions and deletions to the agenda? Hearing none, we'll now open the podium to public comment for items not on this evening's agenda. Seeing no one, are there any staff comments? Not at this time. Treasurer. I am going to take some of your time. Please do. So our external auditor is in this week, Vavrenek Trindane Company. And I had a chance to talk to them for a little bit today. And I know you probably all know this, but it's an interesting process because they are responsible as external auditors for the legality of our finances. So they are going to be doing audits, looking for fraud, basically, to put it bluntly. They're going to be focusing first on parking and the recreation department, mainly just because that's where the most cash flow is. And that's the easiest thing to get your dollars mixed up. So it's important, I think, to mention that they're here and that they report out twice a month because I know the constituents are always concerned about our finances and are they being properly audited and handled. And of course, whether they're being handled wisely is your job. Whether they're being handled legally is the external audit. Efficiently, that's an internal audit. So we're not working on that right now. So again, I think it's important to point that out that we do have lots of checks and balances on our finances and this is one of them and they're here this week. Very good. Thank you. Council members, comments? Kristen, Jacques? I did my first ride on the smart train in Marin to San Rafael up north to Santa Rosa. That was very interesting. So those who are following the trail rail thing, it was very illuminating. Stephanie, anything? Okay, I have nothing as well. We'll go on to the consent calendar. There's only one item and that's successor agency meeting minutes. Anyone like to pull the minutes? If not, is there a motion? Motion to approve minutes. Second. All in favor? Aye. Opposed? It's unanimous. On to general government. This is the presentation of the 2018-19 fiscal year budget for the city of Capitola and on with the show. Mr. Mayor, members of the council, before I kick off our budget presentation tonight, I just want to let you know that we had a very interesting call today from the police department and they respond to a call of a suspicious vehicle in a vehicle. It's a call that I've never heard of before of my career as a city manager and I thought sometimes a picture is worth a thousand words. Would you repeat that a suspicious vehicle inside a vehicle? Suspicious vehicle in a vehicle. So I figured it was a typo but sometimes a picture is worth a thousand words and so this was the response in the call for service. So that's wonderful. That's a spare car. I like that. Didn't have to throw it. Anyway, to just take us back on track I do want to kick off the presentation tonight on our budget. Before I get started, I really want to thank the department heads, the finance department and Jim in particular for all their hard work on the budget. The preparation of this document is not done by an individual, it's done by a team and Jim put a lot of time and effort into really pulling it all together and quarterbacking the process and helping get us from A to B. So I really want to thank him for that. You'll have plenty of time to hear from him and grill him on questions as we get into tonight a little bit further. Overall, as we look at the economy and we look at our revenues and expenditures, we continue to see growth in our local economy. However, it's at a slower pace than we've experienced in recent years. Generally, this is a status quo budget that we will be touching on some process improvements and efficiency improvements that we're either proposing or that we recently approved last year at the mid-year. We have no net new positions. There are some reorganizations which we'll be discussing later in tonight's presentation. There are no new significant revenue sources in this year's budget. As you're going to hear about tonight, the PERS cost, the UAL, the unfunded liability remains our most significant driver of cost at this point and the most significant impact on our future budgets. And as you've heard me say many times during these budget processes, the city's heavy reliance on sales tax continues to pose a threat or risk to the city as we move forward. Overall, looking really big picture, we're estimating that we'll end the year with about a million dollars in fund balance. That's excess of revenues over expenditures in fund balance. The budget that's proposed before you today fully funds our contingents in our emergency reserve at the policy established levels. Real big picture highlights the construction of the new library is scheduled to begin right at the beginning of this new fiscal year pending the receipt of bids. That'll come in at the end of the month. It'll be our first full year of Measure F and we're kicking off funding of those projects and Steve will be presenting status of the CIP projects later this evening. And then we get our first full year of SB1 which is the new road tax at a state level, gas tax at a state level. And we'll be talking more about how those funds get expended. So with that, I'm going to kick it off to Jim for the first really exciting slide of the evening. So the slide up there right now is kind of a summary of revenues and expenditures. The takeaway here as you can see is on the revenue side a lot of those things are starting to level out and growth is slowing down on the expenditure side. Other than personnel, everything is fairly flat right there. Personnel costs are driven as Jamie mentioned by the unfunded UAL and then just basic inflation and people moving within their steps and everything. I think the takeaway on this slide is, as Jamie mentioned, we're estimating ending the year with a positive fund balance of right around a million dollars and that the budget that we're proposing today is balanced although it's $7,900 of revenues in excess of expenditures. So it's pretty tight. On this slide here, I'm just demonstrating what some of the assumptions that we made on the revenue side. So property tax, we're estimating to grow at 4%. So we have the 2% from Prop 13 plus housing turnover. And I talked to the county assessor and that's pretty much the same inflationary factor that they're using there. Sales tax, we're growing it at 1% based on our actual receipts. So we took the last four quarters of actual receipts and in consultation with community services who's our sales tax expert, they're projecting a 1% growth. So from our year-end estimate and our budget change, it's less than 1% but we are growing 1% on actual sales tax. The district sales tax measure F and measure D are growing or measure O are growing at 1% as well. TOT, we're estimating to grow at 1.5%. That one, we'll get into each of these a little bit more as we get later on. Parking revenue is around 1% and then parking citations is also 1% over actual receipts. We had some issues this past year where we had folks out and not out issuing tickets. So we're a little bit behind this year but catching up fairly quickly. That number is probably a little bit light. I've talked to the chief since I have that original number and I think it'll be a little bit better. The 22.5 will be lower. Some of the notes on revenue again, sales tax is beginning to slow and sales tax represents 50% of all of our general fund revenue. And out of that, our top 25 producers are 63% of that revenue and top 5% represent 35% of that revenue. So not only are we heavily reliant on sales tax, we're heavily reliant on a small sector of sales tax producers. Just district sales tax again remaining relatively flat. Property tax growing with the housing turnover. I think I've already touched on all of these. The TOT, that growth is starting to slow. Not so much that there's not as many folks coming. I think we're just starting to see during the peak season, we fill up all of our rooms. So it's more of an inventory issue than it is people visiting Capitola on why that one's starting to slow down a little bit. So for sales tax, to put it graphically, you can see that's fairly flat over the last three years. You can see the orange that's in there was measure D as that ended on December of last year. And then the gray is measure F kicking in January 1st of this year. Bradley Burns is the big one and that's the one that's staying really flat right now. Property tax again growing at 4%. I think that one's a little bit on the conservative side, which is why I placed the call to the assessor. I kind of wanted to bump that up. But when they told me they were going with 4%, I thought I'd kind of be consistent with what they're doing. And the TOT just in graphic form again, pretty flat. So Jamie did mention some overall efficiencies that we did through reorganizations and I'll let him kind of run through those. Sure. So one of these is a position that we talked about in mid-year, which was shifting the parking meter responsibilities from the police department to the public works. This change was really due to the kind of increased complexities of our new parking pay stations where they're really to be operated on by a technician. So we moved, we took one of our PEO positions that was a full-time position and turned it into an hourly position really to help us out during the summer, which is our peak parking demand and our peak demand for parking enforcement services. And then moved those cost savings into public works to increase some mechanic time and then hire more summer help in the summer again during the peak public works demand period. And that was a net savings of about $30,000. As you recall in the mid-year, we also converted one of the police officer positions to a sergeant to help increase oversight within the investigations unit in the police department and that was a $13,000 cost. We also talked about recently a shared building official model where we would share our building official 50% with the city of Scotts Valley pending a successful recruitment and then we would end up with a 50% development services tech, which was a net savings. We're also proposing in this year's budget to convert some vacant finance positions that Jim's been able to manage through reorganization and sort of efficiency improvements in finance which was all told, accounted for three quarters of us full-time staff person and we plan to convert that or proposing to convert that to a half-time development services tech which would give us a full development services tech to support planning and building. And with that switch also comes some of the responsibilities that finance has been taking care of for community development, particularly associated with the housing loans. So the housing loans and management of that portfolio would shift back to the planning department under this proposal. We're also proposing to fill the vacant account in two position at account in one level which has a salary savings and then there's also been a public works reorganization that we've talked about for quite a number of years that involved hiring a project manager to help out Steve on the projects and then with appending retirement or anticipated retirement not filling the maintenance superintendent when that time comes. Say again? Did I jump two screens here? No, you're good. Okay. So again the CalPERS unfunded liability is the biggest thing that we have on the horizon challenging our resources just to put it into kind of numbers. This current year that we're in our UAL cost was $985,000 for the entire city. That's growing to $2.5 million by 2025 so that pretty large increase there. Construction of the new library is going to begin this year and we just got an update from the county on the library fund and actually close that gap. There's another $81,000 in that JPA fund. That number's gone up 81,000 since the last time so our gap now is down to $36,000 which on a $13 million project is. So there's two factors that led. I think the last time you saw the gap it was around $360,000 and so one thing that happened was the campaign has been incredibly successful and they've established a new funding target of raising $600,000 for the library up from the 350 that they'd originally committed to and then in addition the library fund where we worked out an arrangement with the county about how those funds were going to be shared they've been able to bump up that revenue sharing estimate and so that resulted in another about $80,000. So at this point our funding gap is essentially you know we're essentially funded to our budget estimate obviously pending the receipt of the actual construction bids later this month or early next month. And then also this is the first year of Measure F funds and Steve will get into a little more detail later but 100% of the revenue for this year is dedicated towards the Worf, Chetty and Flume projects and then on our JPA that we belong to for insurance we've seen our liability insurance decrease by around $9,000 and workers comp by $16,000. So this is actually a half of that slide that we saw earlier on the expenditure summary so this is a little easier to read but of that increase on the personnel side about half of that is just the PERS UAL and then the other financing uses last year we had transfers going out to CIP projects that we don't have this year so those reduced transfers are really helping us balance this year and then in addition we have the gas tax measure DNRTC money all getting programmed into street maintenance projects. This breaks down our expenditures by category so as a service oriented city you can see that our largest cost is personnel at 64.5%. The other ones kind of all fall in there contract services 20% is pretty large internal services is really just moving into funds IT and equipment and those types of things and insurance and by department expenditures broken out by department PD obviously the largest there at 47 48% public works at 20 and then recreation in the city manager's office kind of fallen in behind that and then capital projects so I will turn it over to Steve Good evening Mayor and Council one of you has to dance the slide for me around yeah so first we'll look at the library fund obviously we have bits coming in on right now looks like it's going to be early in June on the project which will help us tie down but the revenue sources there are the same that we've seen over time as was mentioned the fundraising campaign has been very successful and the other sources has gone up recently so our current unfunded construction estimate is only $36,000 that's something we can deal with when we get to the bids hopefully bids will come in $36,000 under our estimate or I'll be fine but we'll see once we get the budget we'll come back in when we award the contract we'll close up those funding gaps looking at the measure F projects as you know we're in the process of moving forward with the flume and jetty construction right now and doing some schematic design work on the Wharf project so we anticipate a little over a million dollars in revenue for measure F in this next year all of that is being allocated to these three projects the amounts of that we're putting into the flume and the jetty to ensure we have enough to complete those projects we do anticipate them being completed by a year from now and then the balance is going into the Wharf any money that may be left over from the flume and jetty will then be available to be back up into the Wharf fund at this point we're pretty comfortable with the flume and jetty reconstruction costs that those will be sufficient enough and on the Wharf project where like I said we're just starting schematic design I anticipate coming back to the council in the very near future kind of an update on the Wharf project what we're looking at and updating the costs that we had we had some projected costs when we started the engineering contract when we awarded that and we're going to take it and revisit that make sure we're headed in the right direction there measure D so we're in our second year measure D that's the local RTC road fund project we estimate about $300,000 a year and this year we are combining it with a RTC grant which is actually a RSTP grant I can't remember what the acronym is right now regional surface transportation program grant that we got for Bromer Street project for $470,000 so we're going to buy those and do a complete street project repay new sidewalks new bike lanes on Bromer Street from 41st to 38th I think that's one of the most needed streets in the city we have several projects that we know are on the list that were funded in prior years this is a quick review of the ones we anticipate making significant headway on certainly some we hope to complete in that time first is the ADA transition plan we've kind of gone through some staffing transitions who's running that project since our building official left but so we've had the new project manager and public works take that on and we anticipate moving that forward pretty quickly here the Monterey Park Trail keeps running into more and more requirements put on it right now we have to do a soil study to look for contaminants so we're waiting for an agreement with the RTC to move that forward essentially it's designed we're just trying to get the permitting and permissions through that and hopefully we can get that built this year Brisbane Park I know it's been on the books for a while the plans are being revised by Mike Arnone again just to make sure that everything's gonna get built correctly we hope to move that forward very quickly probably within the next month utility undergrounding on Bay Avenue this is tied to the roundabout but this is something that has to happen first we have to get the utilities underground especially in that intersection we have working with PG&E they recently informed us we need to scale it back a little it's not gonna affect the roundabout area but we're working with them to figure out exactly what the scope of that project's gonna entail Park Avenue Sidewalks another project that's been on the books for quite a while and we're actually having a community workshop tomorrow to meet with the neighbors share with them the designs the impacts it's gonna have on their property and allow that project to go forward this fall Park Avenue storm damage that's where the trees fell a couple of February's ago and took out the bike lane we were working with Caltrans to get federal highway money to rebuild that federal highway money ran out so we kind of paused we've recently been told by Caltrans we should move ahead with the design so we awarded the design contract just last week and we'll move forward with the design and then work with Caltrans to try and finalize the funding for that we do have enough funding for the design work using allocated funds from the budget last year and finally 38th Avenue Sidewalk this is kind of a new project that's hitting the records you know we paved 38th Avenue in 2016 a lot of that work was done with a grant we had another RSTP grant from the RTC we've completed that review of the cost and there's actually $90,000 left in our grant they've authorized us to build the sidewalk and we're talking in front of the good year down to where that new 11 lot subdivision is there's a gap in our sidewalk program there we're currently working with the property owners there to get rights of entry to make sure we can get the project completed so we do anticipate that we have design work already done moving forward with that project as soon as we get the rights of entry signed looking at the equipment fund we have a police vehicle that's being purchased partially with general fund money or money coming out of the equipment fund and with their SLEF funds and in the public works we're getting a new concrete breaker which allows us to make sidewalk repairs a little more efficiently and a ditch which is actually very critical to our stormwater pollution prevention program in that we can actually clean out our storm brain inlets with this ditch which rather than digging them out by hand so that's a big advantage to us I will mention that Jim will have to give me the number but I think we have additional funding that's going into the equipment replacement fund this year in anticipation of purchasing a new street sweeper next year those things last about five years and then they wear out and we're about in their fifth year next year so we are kind of building up a bank in the equipment fund for that purchase next year Steve before you go council questions of Steve I had a couple questions right why not you can go back to the sidewalk on 38th avenue you showed yeah there's $90,000 left over and there's a cost of $238 so the rest of that funding was general fund money general fund money that was put in to the project the paving project so there's $96,000 of grant money and there's another $110,000 of general fund money we're actually trying to true that up but that's the funding balance in that paving project right now so we're going to take $110,000 out of the general fund to do this but if we don't take advantage of the $90,000 we lose the $90,000 yeah I have till the end of the year okay I just I can see your and we're and we're not the general fund money is already in that project it's not a new allocation this year okay good thank you for clarifying that and with regard to the street sweeper were we not looking into possibly leasing that out or would there be a contract street sweeper you were talking about prior to buying another street sweeper we were going to be looking at an alternative whatever happened with that so we have continued to research that and that's been a bit of a challenge Larry can provide more detail I'll give a high-level overview but essentially we've been trying to get quotes from Greenways and Greenways have been trying to coordinate with Scotts Valley to see whether or not they could do both cities they've been unsuccessful Larry's recently been talking to Greenways and we're continuing to push on that that's the high-level summary if you need more details we'll have to hear from Larry no I think you just you intrigued the council when you mentioned that we would maybe be able to sub that out and and not have this tremendous replacement cost so I think we're just you know we're following you keep us posted I mean I'm sure it's challenging but is Greenways doing it with any cities in the county right now currently our partnership with Scotts Valley now could grow into bringing them in it could could grow for sure and one of the other things we're looking at you know Steve and I have been talking about is is these each one of these street sweepers cost about a quarter of a million dollars and we end up buying one and they use it for five years and then we buy another one and the old one goes in as the backup from when the main one breaks and we're even exploring you know that means we have half a million dollars of rolling stock at any given point in time and there are smaller street sweepers out there and maybe maybe looking at a different model where we have a smaller street sweeper that cost 50 000 bucks that we use on half of our streets and the big you know the big one lasts for 10 years because we use it half the time and it's only used for the bigger streets and that's that some way to reduce the overall sort of long-term liabilities and costs so street sweeping continues to be an area we're focusing on and we will continue to push on green waste and see if there is an option to contract that out as the mayor said just keep us posted Kristen anything John in terms of your complete streets on Bromer so we've had a project to line up the lights along 41st is there any money that could be available to throw into that on the Bromer Street project to from the Bromer Street project into the signal coordination yeah yeah I mean because that's where the mean that's the first light in the string right up to right it goes from there all the way all the way to the highway gross so it doesn't go to the highway just goes to Claire's okay excuse me can't go to the highway right right now the 770 covers our estimate for you know that public outreach we're going to do on the Bromer Street project and and all the way through construction that is our estimate so right now I can't say there's any available funding to augment the signal coordination I will say on the signal coordination project the air board is in the process of their next round of grants and signal coordination you know that's what funded we had a $375,000 in the air board grant to implement that the bids came in almost double that amount we're meeting with the air board tomorrow to talk about if they're willing to add additional funding to that project and get it going thanks I saw in the budget that you have we have planned to do some new stop flashing stop signs and one at 41st and Melton so that should help so those are flashing pedestrian signs not stop signs and those are actually being paid for by and mostly paid for out of an Ambeja grant so we're proceeding that's not part of the budget document I believe but that was a message I'd put out there so that that'll help a great deal I think at those intersections and so we're putting my three intersections two on 41st Melton and Reposa we're also putting one up on Cliff Drive where the crossing is right in the middle of the road if they're successful there we can look at putting one at Bay and Hill which is another crosswalk we get concerns raised about and that's those are very economical those are about $1500 a sign versus the rapid flashing beacons which are about $50,000 because we have gotten emails from people going to the spa that wanted to have a stop sign yes yeah great thank you Steve Peter you have something well maybe it can wait but I was just we talked about prioritizing the public works activities I don't know if we're going to talk about that in any great detail here but yeah we have slides towards the end on that all right but Steve that the projects that were funded in prior fiscal years those are the ones you're focusing on hopefully to be completed by the end of the year yes fantastic yeah measure D funds I saw on the budget we showed measure D funds at 300k I thought we were more at four four plus on our measure D did we get sliced and diced again yes it looks like a painful subject so I'll press it there's been a bit of a disagreement among at a staff level between the various agencies about how to interpret the agreement that we ended up reaching about how the measure D funds were going to get divvied up I'm still trying to work at a staff level to try to resolve it because I believe we should be closer to seven and a half seven and three quarters percent of the total local pie and we're closer to six which is result that's results in the difference of about $90,000 $80,000 significant it is it is and unfortunately it's not easy convincing the RTC staff how to do this so when you get to the end of your rope staff wise you can bring the council in and we can I have a coordinating with RTC rep and our other RTC board member one step before and please feel free yes we are working together good thank you thank you Steve potential CDBG grants I think this Katie time so I can cover this one quickly so I just reminded the council we submitted a $2.7 million CDBG grant this year was going to fund the Claire street complete street project which is very long promised and long awaited project we have not yet heard on the grant it also included some housing out stuff that we were going to find out of the CDBG grant similar to the previous CDBG grant we got which was for some rehab and home rehab projects and home buyer assistance programs we anticipate hearing in the next two months maybe less so if it's awarded it will require a council action to execute the contract with CDBG and if I'm not mistaken we have already paid for all the engineering on Claire's have we not because I only Claire's is a special street for me because the first night I was on the city council when ice covered much of the earth we voted on that so unfortunately we have not we've I think that first night we approved a concept plan yes we did as far as we've made it so far on that project and we try and move forward the funding disappears on us we do have a concept plan getting through engineering will be pretty quickly but we have not completed that at this point so we get the grant and will we be able to start construction within the time frame of the grant absolutely okay we have a timeline spelled out in the grant application and good because Ron Skelton is considerably older than me and I made him a promise 18 years ago I'd like to keep it okay thank you question he's going to hold you to it Jack yeah um so a question came up last night do we have an idea how much of Claire's is going to be paved one into the other yeah well from Warfrode to 41st it will be okay there was a concept of doing half at one time I believe so that's what's in the project certainly if we have to defer from to 46th 42nd from Warfrode to the sanitation project we'll do that but then we'd be able to come back and pave that as soon as that project okay so it's funding for the toll thing at the end of the day it'll all be it'll all be done okay thanks back to you Mr finance director or city manager who's going to take the next one city manager so one of the things that we do during the budget process is we also like to look ahead because budgets aren't prepared in a vacuum and there are future fiscal years and for those of you who are paying attention I'm sure you noticed that next year's proposed budget is significantly out of balance as is proposed it's a half million dollars out of balance it will not be proposed that way next year when we get there we will obviously identify opportunities and how we will tools to balance the budget so one of the things that we use to develop our multi-year budget is a series of assumptions about what our taxes and what our revenue sources are going to grow at and one of the key points here you can see my arrow is one percent sales tax growth over time and that has a really dramatic impact on city long-term finances because that represents such a large chunk of our revenue stream and I don't know that one percent a year is right based on the most recent data we got which was a negative year over year growth it's the number we're using right now I'm hoping that that was a one-time blip and we do continue to see growth in the future which has a pretty significant impact particularly when you get to these out years but when you take a look at that the net effect is as you can see in coming years is growing budget deficits so in graphic format this is what it looks like for those of you who don't like the number of tables this is the table format and so that that will lead us into I think a conversation that we'll have a little bit later about sort of our work plan priorities and some of the things that for the city to be focused on in this next coming fiscal year so another thing discussed a little bit further to this evening is the fund balance which is as Jim mentioned earlier projected about a million dollars for this fiscal year there's potential uses for it at this point I think my number one recommendation would be to keep it in general fund balance because we're going to have challenges I know coming fiscal years an option would be to put a portion of it into the Perch Trust Fund this would allow us to earn a higher rate of return on the funds and could be used in any individual year to offset some of our Perch's obligation in that year so in a sense it's put into the trust fund but it could be used in any given year that we see fit there are other opportunities obviously that we could use fund balance for we could put more money into the library at this stage which I don't think is warranted given the limited funding gap that we have facilities all of the facilities reserved can always use more funding we have an aging stock of buildings in the city and there's no shortage of things that we could do to them to help improve them or other CIP projects but I do want to reiterate the recommendation would really be kind of focus on one or two on that list to help deal with future budget issues could we pause right there okay I'd like to get council weigh in on this is a really important slide and Steve one question for you basically yes or no and that is given the you know significant CIP work list that you have putting more money into CIP this year is not going to make any of those projects go any faster the one project that is unfunded at the at this time which you'll see in a couple more slides is the park avenue storm damage repair because we're hoping to get federal highway money from that but for that federal highway money doesn't come through that would be a good investment you have a full dance card for you we have a full dance card otherwise but I just wanted to mention that project because that could use some money Ed yeah I I think so I was going to ask about the park avenue project as Steve just hit on that that was a question so I think I'm good for now good anyone else you know we we talked about this at the fact last night and I think there was a lot of there seemed to be a consensus regarding the first two which is leaving it in the general fund and PERS trust fund maybe splitting it 50-50 but we do make money you know we make we have some gain putting it in PERS and we're certainly going to need it so it's not like it's locked away and holding on to half a million dollars makes good sense Peter do I chime in on that with the fact so yeah comments so we that I'll just reiterate what you just said and that and that is well you know money for capital improvements is like you said Steve's got a full dance card you know he's he's been short staffed up until recently and even if he had a lot of money out he'd me not be able even to spend it so we uh we all agreed I don't think there was anybody dissented that we wanted to just you know I basically have a rainy day fund because the rainy day we know it's coming so and and the PERS trust fund is certainly part of that rainy day fund because we know that's happening jock yeah so another thing we talked about I believe was the jstree park the parking lot area yeah so I'd like to know where that's at because that's a liability issue yeah sorry that was in the facility son so I did make it on the CIP list we are prepared to go out to bid on that we're kind of looking at our options how best to bid it at this point but we have one quote came in quite favorable so we'll be moving forward with that and doing the basketball court great and on that note we had our breakfast club this morning with two members of the school board and they were very amenable to the idea of youths reaching out to Scott and working out the the incremental increases in the lease based on the amount of money we spend on improving jade street I will do that I am not optimistic that we're going to have a lot of available funds in coming years at this stage but we can have that conversation well everything we do including the paving should not just up a little bit when the roof goes on a little bit more keep going okay back to you Steph okay so what I'm going to do now is I'm going to briefly touch on the budget principles that we've identified in prior years and then what we'll be doing is focusing in on some work plans and some suggestions for work plan priorities but then we're looking for council feedback on them either tonight or at a future budget meeting so one of the kind of core principles that the city has always identified as maintaining a balanced budget under our sort of recommended goals for the fiscal year really kind of the sort of the nuts and bolts of city operations of what we do to make sure that we have a balanced budget supporting economic development has been a long-standing city goal obviously a primary driver of that is continuing to work with the mall to facilitate their redevelopment efforts to the extent that it's something the city controls it's not so much but to the extent that we're maintaining open lines of communication and trying to help them move through the issues that they encounter we can continue to do that maintaining a reasonable level of fees and that's always embodied with our fee ordinance and then our fee schedule update which we are scheduled to update I believe coming up in June we talk about maintaining a transparent and efficient and accessible government as a long-held city tenant we've identified specific goals regarding maintaining information on the website and continuing to implement best practices and continuing to outreach to the community recognize the high priority that our community places in public safety and our police department one of the goals that we'll talk about in a little bit more detail tonight is is a new neighborhood watch program that the police department plans to roll out in the communities filling some vacancies within the police department completing CIT training for all of our officers and then working with other agencies this is kind of an inside baseball issue but the records management system county why it's going to need updating soon and we take care of that at the 911 jpa level but that's going to be a that's going to be an important thing to do and then continuing to review the funding and prioritizing the funding for the capital improvement program and our community service organizations that's both funding for the CIP and then funding for the community grants through a two-year grant cycle so what I've done here is and was presented to the fact last night in a slightly different format is kind of the top five program issues that staff has identified to focus on for this next fiscal year and I'd love to hear council feedback about them the fact recommended this as a priority although I think the neighborhood watch wasn't included in what was presented to them but frankly I think since each different departments are addressing different ones of these they can all be in my mind they're all priorities and if there's another high-priority workload item work plan item I think it would be great to hear from council either tonight or at a future budget hearing but so the first one is is developing options for council consideration to address rising purse costs and that can include identifying opportunities that we may want to pursue for new revenue identifying opportunities for things that we are doing today that maybe we don't do in the future or identifying other opportunities so that we think is a very important thing and it's something we would need to move on relatively quickly in this fiscal year the cannabis regulatory framework has been presented to the council it's moving through the planning commission coming up at a new new recent coming meeting and then it'll be coming back to the city council for consideration and then if we move forward in the strategy we've outlined ultimately before voters for approval in November the neighborhood watch program was something that chief is prioritized and something he'd like to see happen it was something I think it was used heavily more heavily in the city in in generations prior but it's something that they're going to take a look at and see about re-implementing it and see if there's a community interest in getting that going again obviously the zoning code update has been a major work plan item at this point it's now all sort of with the coastal commission so there's going to be a lot of coordination with the coastal commission about how we're going to certify our zoning code how they're going to certify our zoning code and as always the mall is such a focus for the city and the long-term fiscal health of the city continuing to work with them as they you know go through their outreach process now and hopefully as they come in with some sort of project for city consideration secondarily then these are a bunch of projects that we've already talked about tonight but we put them down in one place sort of kind of the the summary of where we anticipate to be on our capital improvement projects this year and so it's one number one is getting going on the construction on the capital library two is building the flume and jetty the reduce on those and then completing the schematic designs for the wharf the Monterey park and pedestrian pathway that's the Steve is talking about that's basically the eastern access point out of the Pacifico parking lot we hope that that project can be complete but if the soil testing comes back negative it's very probable that there can be problem further issues with that project we were not anticipating remediation would be necessary with this project the RTC and sort of the county's position on that has changed over time and so that's a new impediment in that project's path path pardon the pun completing Rispin park as Steve mentioned we anticipate bringing that to council for a bid approval shortly here the street maintenance projects that includes Bromer the park avenue storm repairs which as Steve mentioned is currently unfunded but we're in engineering now and then the slurry seal project which council approved last meeting and then we also have two sidewalk projects the long-promised park avenue sidewalks and then the new 38th avenue sidewalk project so that's a summary of the kind of the big capital projects and where we anticipate ending the year so with that that really concludes what we have for council our presentation this evening and what we're looking for I think is is if there's questions budget questions that we can either answer here tonight or research items which you'd like staff to go back and research before our next budget hearing for any other direction regarding the work plan or CIP or budget items that's been presented this evening we'd love to hear that direction tonight and otherwise our next step will be a May 30th meeting to review the fact recommendations and take another look and dive into the budget before I bring it back to the council is there anyone in the audience this is a public meeting who would like to address the council on the items that have been listed tonight please step right up state your name write it down on the clipboard and talk to us welcome Mr. Mayor how are you doing oh there's no pen but my name is Jack Pigley how was it one there send that down I just want to briefly address two two issues the Rispin Park I think that looking at the budget it might be wise to convert Rispin Park into a private residence seems like we have quite a revenue gap Rispin Park is a revenue expenditure we have lots of parks we have lots of places in the community where you can go and enjoy the environment but I think that there could be a significant revenue for converting Rispin Park into a private residence and second I just want to talk about the CalPERS I think that pension funds across the United States have seen a decline and I think that there might be some necessary decline in the benefits to city employees I know that's a hard thing to have happen finance meetings aren't romantic and so we might have to see some some decrease in in pension benefits so that we can remain solvent thank you thank you anyone else and then I'll bring it back to the council hey do you want to start us just a couple questions sure Steve or Jamie I just just want to know just for the council's sake the status of how much funding is available for the Rispin Park project and for the Park Avenue sidewalk projects both the sides the dollar amount there you saw here it is right there that's part of our grant the Park Avenue sidewalk has about 146,000 and the Rispin Park has about 288,000 currently available that's how much is in there and we know what are there bids yet on what the cost of the project is what the shortfall is or right we're that's what we're trying to come up but Park Avenue sidewalk that's probably about I'm going to say three quarters of the necessary funding so we're real close there we don't have a plan I'm just trying to get a feel for where we're at okay Rispin Park is really still kind of an unknown at this point so I'd be hesitant to say but probably need at least another $100,000 there okay right there I just wanted a ballpark I appreciate that Steve that 288 is is part of a Park's grant isn't it is that some grant funds in there so we had a grant fund that went to the ADA ADA project okay and then we took some of the that's what I'm using it with sorry thank you okay continue it that's it I just have those two two questions Christian I don't really have any questions but I'm glad to see that uh the proposed budget work plan has CalPERS as number one because it's I'm really worried about it and it's something that I I'm looking forward to continuing to look into I like the list of priorities of projects that we're going to be delivering to the capital citizens here I think that's a great list of things that once they're completed they'll greatly benefit the city also to police chief commend you for bringing back neighborhood watch we did have a recent hearing want to talk about the subject but people did come up and talk about the issues they had in their community and on the street that they're aware of and so these are the kinds of things they'll help address that one thing I I'm glad to see here is support economic development the mall to me seems more of a long-term thing we hope it could get done tomorrow that everything would change but I don't think that's going to happen so in terms of continue to research economic development options and tools when you think about the fact that our sales tax pretty much is dependent on so few options in the city I think one of the focuses of economic development if we do a committee which I think we should is to broaden out the options that we have to draw income to draw sales tax from we need to sort of broaden what's available and hopefully get a broader base for our sales tax that's what I'd like to see on that effort there Stephanie do you have anything a couple of questions and a comment on page 60 we have the community based health and human service providers and we do have a figure in there that we have talked about continuing in future years but what I would like us to do is consider using the same application that the city of Watsonville is using and scott's valley is going to consider that also that would make the providers lives much easier than filling out three applications for scott's valley Watsonville in capitol Watsonville's is online their staff person said they would be happy to work with us and we can tweak a few things if there's a few questions there that we don't like but I think we really need to do it and we should get it out as soon as we can because they can't go into their next budget year without knowing what their allocation is going to be they feel really nervous about that and I know they talked to larry but I would strongly urge us to consider and vote on their funding sooner rather than later because they need to know their funding and they have funding gaps also and they need the local monies that's really as important to them larry can you speak on the application system absolutely mr. mayor council members so we've looked at that when we talked with Watsonville the unfortunate thing is Watsonville is in the second year of a two-year grant so they went out last year so what we need to do is figure out a way if that's the direction the council wants us to go kind of getting everybody back on the same year annuals or or by every two-year grant cycle so they're right in the middle they're not they took applications last year we are going to be doing it this year that being said we're going to make it are the application we're working with it's going to be very similar to Watsonville's it's not going to be asking a whole lot more information if any they they actually have a different set of funding that they ask questions about so we're going to be making it a much shorter application I have talked to some of the community grant folks and you know they understand that we're off a year and that but we're going to try to make it as simple as possible for them at this point can you work with scott's valley so we can they can just fill out one application rather than two yes we'll be we'll be working with scott's valley as well but they they should be the information should be pretty much transferable as far as the main information each jurisdiction will definitely want specifics for their cities about number of people they serve and that sort of thing but for the most part they're going to be very similar as far as the data that's required well it would be nice if they were similar yes so that so the providers could just fill out one and change the name and change the numbers and then send it in because it's a lot of work for their staff to do this and some of them have very small staffs and it just takes a lot of time certainly anything else Stephanie yeah I have some questions on page not a page number well should we have page numbers on these mightn't have page numbers city manager administration right after the mission statement right at the beginning whatever whatever you're on the white white tab page three page four got it doesn't have anything for information systems specialist there for the next year are you changing that so the information system specialist we've gone back and forth and since so since we lost our last information system specialist we have ended up not really that was a two-fer what was a two-fer it was a two-fer it we've ended up contracting out that position so you see how it disappeared in 16 seven actual then we had it in the 1718 adopted we've ended up continuing to contract it out so that's it's now a contract in the contract section and finance director tell me about the on that finance page the next page just before the police summary and it has the authorized positions tell me what you're thinking there for the positions so currently we have my position the senior accountant we have an accountant to that's vacant the account tech is a three-quarter time and she's been backfilling the accountant to there doesn't have anybody there for account and tech though for the proposed year right so what I'm proposing is to convert the to fill the account to vacancy at the account one level and then the account technician position will be vacant and we'll give up half of that FTE to development services for the development services technician and building okay and the receivable clerk works three-quarter Helen works three-quarters time correct okay I thought she was picking up more hours she was a while she was when Mark Wells she and Lawni first left oh sorry she was picking up more hours when the previous finance director left and Lawni retired yeah and then once I got in we got through last year's audit she asked to go back to the three-quarter time okay and we've been able to make that work great that's good okay going on two more pages to animal services it's going up from 38,000 to 52,000 is that just their new the new charge they just it just suddenly went up a whole lot good evening good evening Mr. Mayor members of the council to answer a question that is the contractual increase on a year-by-year basis with the four-year smoothing effect I believe that we're in the current fiscal year 17-18 that's year one upcoming budget is year number two of the four-year smoothing effect with increases in each year the amount to my understanding is 42,000 I think this 51,000 is in year three of the four-year contract so this is a typo the actual amount is 42,000 roughly 42,000 okay and how do you feel about our services we're getting good service I think it's excellent service I think the relationship is much better between our police department animal services and I think our response is better as well and are you the board member or who's the board member that goes to the animal services agency Sergeant Marquis Booth and myself share those duties great well let us know if there's anything interesting going on that we should know about I will thank you with their services okay I was just going to provide a little bit more background on this one so recall for a very long time we did our our animal services in in-house and then we would contract with somebody else to store and house the animals at some point we stopped using SPCA due to some concerns about how that was working out and we contracted with ASA for a number of years under very favorable terms and ASA recall basically issued us a notice that said we're not going to continue to contract for services with you capital and you have to join the JPA or not at that point we said well we'd be interested in joining but the formulas that you have for allocating costs don't work for us so they did revise their formulas and then they gave us sort of a proposal to sort of smooth us in from our old contract rate into a full-fledged member rate but remember it was a significant step increase and so this is the second typo of the evening that we've caught but it is this number is off by about $9,000 and so that'll be corrected as we move forward we'll have a list of all the sort of different corrections because there's a number of little items but this is that ramp-up period in the animal services JPA costs okay thank you okay the next page public work summary on the personnel list also there one public works director one engineer project manager one maintenance superintendent field supervisor maintenance worker one and two maintenance worker three mechanic and environmental projects manager the environmental projects manager is dany yes okay and we have one and a half mechanics who's the one's one's already a staff person and who's so that is the change we made at mid-year to take meter maintenance into the public works department we took one of our mechanically adept maintenance workers and made them a half-time mechanic to work on the parking meters he's also helping out okay so that's the other kind of yes for the eight and a half position that's just up above that maintenance worker one or two it says eight and a half positions okay great thank you in addition I will note that there's a bit of succession planning incorporated into that maintenance worker transit the the mechanic transition you know to make sure that when our mechanic if he does when he does retire that there's somebody who's prepared to step into that role in addition I will note that we have this maintenance superintendent scheduled for a full FTE this year it's there's potentially retirement that'll occur earlier in the year in which point in which case that would revert to a sort of half FTE for half the year and where is Ed's position in here Ed is she's actually been working under a contract he's going to be moving into an hourly annuitant position I believe contract first July 1st July 1st so he'll move out of contract service and just into an hourly hourly annuitant it's probably a better way to capture his costs okay okay the next page under fleet it says one and a half for for mechanic senior mechanic so that's that change that's where that shows up there okay into the blue section internal service funds under library no not our library Andrew it's a different book different she has different colored tabs yeah but and no numbers and they're for planning the other side of the library page home program reuse special revenue funds what are we planning for that this year so under the home investment partnership with the home programming loans this is for affordable housing activities and this I believe the money is used towards the management of the Bay Avenue senior apartments and I'll just first start that saying and stepping into my new position I'm getting used to seeing where all these funds go and where they're applied so I'd be happy to come back to you with a thorough explanation of this but there's a the Bay Avenue senior apartments leave there are loans that were established in there this is part of the like repayment of loans that comes in through through that the process of so so the expenditures that are in there are for monitoring on those home loans which are associated with the Bay Avenue senior project but by and large but there is $200,000 of fund balance it's a restricted source so it needs to be used for affordable housing but there is fund balance in that in the home program reuse fund right how much of it do we usually spend we haven't spent very much of it last so the balance has grown over time you can see actually it's pretty nice summary over time you've seen that the there's revenue that's been coming back into the fund so the fund has been growing we haven't identified a specific use for it it's relatively restricted funds and I don't think sitting here either myself for the community development director can identify exactly what the restrictions are on home program funds but we could come back to the council with more information about that okay and then next next page the housing trust fund where where maybe this is for finance where are we getting this money that says other finance financing uses $25,000 and you can come back with that answer too so so that's actually an expenditure so so the housing trust revenue from that comes into the housing trust it's the inclusion guarantees that's paid for on new development projects and the other financing uses what that's been is recall when we closed the Pacific Cove mobile home park we relocated a number of low-income residents and at the time when we identified that debt we said okay I can't remember what the percentage was 30% of the debt was going to be paid for using the housing trust so though that other financing uses that's going for the debt service to pay for our costs associated with closing the Pacific Cove mobile home park specifically relocating lower-income residents so how long is that that going to go on I we we can check it's yeah it's that's okay yeah frankly it's been a bit of a sinking fund we've known that that's been the case so we have been sort of scaling back the expenditures out of it this year we put bumped it up slightly because the revenues did increase but as a result the housing trust hasn't had much balance because we've been using it for that debt service and the final payments March 1st of 2029 and you can also see under contract services that was Carolyn Flynn's previous position that's now gone away that the 14,963 where it's her salary included so Carolyn is retired did we have a retirement party we did we did not have a retirement party she was a contract employee she's still has been at city hall a few times but um yeah she's told us that she's at this point ready to step away and focus full-time on her teaching and her writing great yeah we should all send her a card we should get a council card and I'll get one and bring it in she brought in I did not I did not I don't see her for a long time but I didn't know she'd retired are we having a party for a lease by the way we will well we should we should she's been here almost 30 years yeah half her life she's been here okay my other question is where's the money oh I think I have one more PERS contingency reserve facilities reserve we're bumping that up to 800,000 the fund balance is going up to 800,000 I guess well we're transferring money into that correct correct we're uh in the 17-18 budget council authorized us transferring or adding depositing 500,000 into that PERS trust right right okay where do we have money for the remodel of a city hall facilities facilities fund but we don't have a whole lot going into the facilities fund we set aside $7,500 $75,000 last year yeah that's there still there I don't know that we'll spend all of that this year and it'll stay how's the planning coming we're trying to finalize what were the basics we're just kind of trying to finalize the I'm sorry I apologize I have a question for you apologize so we are kind of we have the the basic concepts we're just kind of finalizing what each office that we're going to be able to touch is going to look like there's just been a couple changes of late that we're wanting to address based on employee requests so it is still moving forward just a little slower than I think we want idea about when you're going to start it soon we have to get with there's been a change that I think we just have to look at to see what it's going to take it's a little more in depth than we originally thought out thought it was going to be so again I have most of the quotes for all of the I guess the carpeting and the flooring and the wall but we don't want to get going on that until we are sure we're ready with more of the more of the construction type issues so we have a we have a plan that I think the public works and director myself are going to kind of figure out if we can do that in-house or we have to find someone to contract that work for so okay thank you like to be done before I leave yes before I can I leave Jacques you want to go again I just have a question for Larry so um yeah I'm I'm interested also in the common application process when the county ran it this is one thing I said they ran it through the county and everything was online that's correct that's correct so is there any way we could get back to that because there was a lot of efficiency in that and I know you can't answer that right now but you know if we could dovetail was Watsonville which I think is you know an option that we could look at I don't know if it's going to fit our needs but somehow we'll definitely look at electronic ways to do it the reality was that application was much more complex than we needed Watsonville needed or Scott's Valley needed so there was a lot of information that was required that honestly we didn't use it was mainly for the county and their the the human services department so they had a lot more requirements so we basically take just so you know we've we've kind of taken what Watsonville's done and kind of paired it down even further so and I've talked to some of the providers and they're fine with it I think you know maybe a little different moving forward if we if we do get the application out maybe a little sooner that would make them feel better the reality is we never allocated funds until December of the fiscal year or never paid so it's not going to change the the timing of the funding it's just that I think they were a couple of more definitely more concerned that it made planning maybe a little more difficult right their their budget depends on what they know that revenue is going to be right and in many ways the nonprofits are our partners here in the community correct and so we get a lot of benefit out of supporting them and capital has been very generous in that way and I just wanted to say that I support generally what Stephanie's brought up and one of the benefits of the common application was it was one application fits all and you're absolutely right that what we need in is not as much as what the whole thing you know Santa Cruz County required in Watsonville is more in line with us too so thank you Ed next I'm not sure this application process worked but would it be who of us or would it make any sense if we're out of sync with Watsonville to do a one-year contract to get in sync with them and then go back to our two-year contract that's just that you know our two years been working so well and I think we're just looking for not so much being in sync but using the same application I think that's the the real benefit to the groups so there's no advantage of being to do them all simultaneously okay Stephanie I'd like the council to consider putting a thousand dollars in the budget for to save for about four years when the bushes grow up again on the yellow path yet the golden the yellow brick road so that council member doesn't have to pay to have those trimmed that the private property owners were absolutely willing to have those bushes trimmed so you could see the light so you could see the beach so you could see the boats so you could see Capitola and but it's that should be paid for by the city we'll talk about it with public works I'd like to talk about headcount and thank you very much we have the same or reduced headcount I always applaud that because that's one of those benchmarks that people always look at and yet I have concerns about the police department and chief maybe you'd like to speak about having a reducing by one officer it seems like we're always short one patrol person and I know we just brought on the fifth sergeant I know the rationale for that and supported 100 percent can you speak to our workforce are we an officer short and could we use that that 16th officer out there I'm very happy with the mid-year proposal when we talked about this and transitioning from four sergeants to 16 patrol officers to currently five sergeants a fifth sergeant and 15 patrol officers if we get to the point of full staffing which would be 15 total patrol officers we'd be in a better position than we are currently but that's the right formula for efficiency for operations and the necessary supervisor oversight oversight in my opinion so we could stand to have another police officer or is 15 15 is the budgeted number and that's the appropriate number it's the appropriate number that's all I wanted to hear thank you I think you have direction I think the if you come back to us you know compiling something to make us feel better about peres in the coming year and include in that the potentials such as we know that getting the new hotel built either in the village or on 41st avenue I know there's one of the offing up there as well um also what the effect of the cannabis tax would do to our budget to help bridge the gap in the coming years and any other ideas you might have we might also but for the next meeting reach out to the mall and see if they have a better idea of our timeline because I don't know that it's necessarily a as long a term project as we think I think they're going to go at it incrementally so we may start seeing some improvements in the mall in the next couple of years and especially with new tenants and with incremental refurbishing can you also update us on the status of the Sears property and whether the planning commission and community development is going ahead to approve the demising of that building and we're going to see new tenants in there or is that on hold so let me touch on first on the perrs issue I think we can come back at the next council meeting with you know some some budget scenarios of like what the cannabis tax could do what the hotels could do what some other tax options might look like the ball project I was on the phone actually with the mall ownership this week and that this was the conversation this exact topic and and I'll be honest with you it really comes down to for the mall owners at this point at site control how much of the site are they going to control and are they designing are they designing just for the piece that they own today or is it the piece that they might own tomorrow and so that's that's the push pull that they're facing so in some senses I think councilwoman Harlan's point about it being a longer term or maybe it was councilman for trans point that it was maybe a longer term project it probably correct but then again the dominoes could fall next week and suddenly we could be in a different sort of mode with them so it's really hard at the stage to predict where exactly the mall is going to land I think an update on Saratage is warranted but let's wait until the next meeting because it's a little bit fluid situation right now and our city attorney doing some work for us and very good we can come back to you with that excellent Stephanie Scott's Valley is thinking about putting a sales tax measure on the ballot and also increasing their TOT to 12 percent perhaps so this would be a good time for us to put that measure back on increase in TOT now I think we'll hear from it I've been working on that I've been talking to people because I have been talking with Scott's Valley also and there are a couple other agencies Watsonville possibly also but right now I'm just doing some background so we don't have any major opposition against it I think there's a possible way that we might be able to do that and make everybody happy so keep it posted on that I'd like to not spend my last year on council on a postcard thank you very much so if there's nothing else we'll adjourn the meeting to our next special meeting which is May 30th May 30th two weeks from tonight thank you all thank you yay